Question : 31) Comparing the short-run Phillips curve and the long-run Phillips : 1227970

31) Comparing the short-run Phillips curve and the long-run Phillips curve, we see that there is

A) a tradeoff in both curves.

B) only a long-run tradeoff between inflation and unemployment but not a short-run tradeoff.

C) no tradeoff in either curve.

D) only a short-run tradeoff between inflation and unemployment but not a long-run tradeoff.

E) no relationship between the two curves.

32) The expected inflation rate is the inflation rate that people forecast and use to help set

A) the money wage rate.

B) the real wage rate.

C) the natural rate of unemployment.

D) real GDP.

E) the price level.

33) At full employment, the expected inflation rate is ________.

A) equal to the inflation rate

B) higher than the inflation rate

C) lower than the inflation rate

D) unrelated to the inflation rate

E) unknown

34) In order to keep the real wage rate constant, the

A) money wage rate must increase by the same amount as the inflation rate.

B) inflation rate must be exactly one half of the expected inflation rate.

C) nominal interest rate must be equal to the inflation rate.

D) money wage rate must increase when the price level falls.

E) money wage rate must decrease by the same amount as the inflation rate.

35) Based on the above table, if the current price level is 100 and the natural unemployment rate is 5 percent, what is the expected inflation rate?

A) 2 percent

B) 3 percent

C) 5 percent

D) 8 percent

E) 12 percent

36) Based on the above table, if the current price level is 100 and the unemployment rate is 4 percent, then the

A) inflation rate is 8 percent.

B) expected inflation rate is 8 percent.

C) inflation rate is 2.8 percent.

D) expected inflation rate is 2.8 percent.

E) inflation rate is 108 percent.

37) According to the natural rate hypothesis, in the short run an increase in the inflation rate brings

A) a decrease in the unemployment rate.

B) an increase in the unemployment rate.

C) no change in the unemployment rate.

D) a decrease in the natural unemployment rate.

E) an increase in the natural unemployment rate.

38) The natural rate hypothesis asserts that

A) when prices change, the inflation rate changes temporarily and then returns to its natural rate.

B) changes in the unemployment rate are natural and long-lasting.

C) price changes occur at a natural rate, near a 6 percent average inflation rate.

D) changes in the unemployment rate from changes in the inflation rate are temporary.

E) changes in the natural unemployment rate are only temporary.

39) The natural rate hypothesis states that when the inflation rate ________, in the short run the unemployment rate ________ and in the long run the unemployment rate ________.

A) rises, decreases; returns to the natural unemployment rate

B) rises, decreases; decreases

C) falls, decreases; decreases

D) falls, decreases; returns to the natural unemployment rate

E) falls, increases; decreases

40) The natural rate hypothesis states that when the inflation rate

A) increases, the unemployment rate will decrease permanently.

B) decreases, the inflation rate will decrease permanently.

C) changes, the unemployment rate changes temporarily and eventually returns to the natural unemployment rate.

D) changes, the change is only temporarily and eventually the inflation rate returns to the natural inflation rate.

E) increases, the natural unemployment rate increases.